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This story is from January 10, 2007
Banks to be fined for seizing cars
Forcible repossession of financed cars by musclemen will now cost banks and finance firms a whopping Rs 50,000.
They can’t take repossession without clearance from a civil court if the car owner falters on loan repayment, the State Consumer Commission has said.
Coming down heavily on financiers for allegedly humiliating and harassing car owners by employing goons for seizing vehicles, the Commission’s president, Justice J D Kapoor, said: ‘‘Every bank and finance company will have to pay a minimum of Rs 50,000 in case of car or any other vehicle, and Rs 20,000 in case of two-wheelers and three-wheelers for causing mental agony, harassment and humiliation.’’
Pulling up the recovery agencies for selling repossessed vehicles at highly undervalued price for adjustment of sale proceeds towards loan dues, Justice Kapoor said loan agreements were civil contracts and hence the financing firms needed to equip themselves with civil court’s order before reclaiming financed vehicles.
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